Financial News: Eurozone GDP Growth Slows In Q2

Eurozone GDP Growth Slows In Q2

09/06/2024 - 08:14:00 (RTTNews)

(RTTNews) - Euro area economic growth rate for the second quarter was revised down as the positive contributions from government consumption and net trade were partially offset by the slump in investment.

Gross domestic product grew 0.2 percent from the first quarter, which was revised down from 0.3 percent estimated initially, data from Eurostat showed on Friday. The initial estimate suggested that the economic growth steadied at 0.3 percent in the second quarter.

The annual GDP growth for the second quarter was confirmed at 0.6 percent. This follows a 0.5 percent rise in the first quarter.

The expenditure-side breakdown of GDP showed that household spending fell 0.1 percent on quarter, while government consumption growth improved to 0.6 percent.

On the other hand, the decline in gross fixed capital formation deepened to 2.2 percent. Exports advanced 1.4 percent and imports moved up 0.5 percent. As a result, the net trade contributed +0.5 percentage points to GDP growth.

In the second quarter, employment increased 0.2 percent on quarter and by 0.8 percent from the same period last year. Hours worked grew 0.2 percent sequentially and by 1.4 percent annually.

Labor productivity based on persons fell 0.3 percent from a quarter ago and remained stable on a yearly basis.

In July, the European Central Bank left its key interest rates unchanged after lowering them for the first time in five years in June. The bank is widely expected to cut rates again in September as economic outlook remains bleak.

Capital Economics' economist Andrew Kenningham said the ECB looks certain to reduce its deposit rate to 3.5 percent from 3.75 percent next week and policymakers will probably signal that they expect to lower rates only gradually in the coming quarters.

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